A Quote by Joe Lonsdale
Great VCs are more than mere investors; they are often seasoned leaders who have built companies themselves.
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There is a natural tendency for investors to devote a significant majority of their time to finding new ideas. After all, uncovering great companies selling at great prices is the lifeblood of successful investing. But in the never-ending quest for the next great idea, investors often give short shrift to their existing investments.
Investors have to remember: corporate profits are going up, but stocks are going up faster. How can that continue indefinitely? Investors can only earn what companies themselves can earn; the government or the markets themselves don't kick anything in. How can you get anything more out of a farm than what it grows?
Understand that VCs are simply a sophisticated form of financial investors who, in turn, need to satisfy their own investors.
In most cases, it's slight and often unintentional gaps in integrity that hold leaders, their employees, and their companies back. Despite their potential, these leaders harm their employees and themselves.
State funds, private equity, venture capital, and institutional lending all have their role in the lifecycle of a high tech startup, but angel capital is crucial for first-time entrepreneurs. Angel investors provide more than just cash; they bring years of expertise as both founders of businesses and as seasoned investors.
Authenticity is about imperfection. And authenticity is a very human quality. To be authentic is to be at peace with your imperfections. The great leaders are not the strongest, they are the ones who are honest about their weaknesses. The great leaders are not the smartest; they are the ones who admit how much they don't know. The great leaders can't do everything; they are the ones who look to others to help them. Great leaders don't see themselves as great; they see themselves as human.
Most great companies in tech have been built by personal referrals for the first...at least 100 employees and often many more.
Growth is kinda built into everyone's genes. It's built into management's genes, the salesman's genes, the investors' desires. People expect companies to grow.
VCs invest in innovation and disruption, but how often do they innovate themselves?
If you think about companies that were built in Silicon Valley, a lot of them early on were chip companies. And now the companies that are there, like Apple, are much more successful than any of the chip companies were.
More people can be great leaders than think they can, but they need a purpose greater than themselves.
When the trust is high, you get the trust dividend. Investors invest in brands people trust. Consumers buy more from companies they trust, they spend more with companies they trust, they recommend companies they trust, and they give companies they trust the benefit of the doubt when things go wrong.
One of the best investors around, Joel Greenblatt, has written a popular, charming and funny book about investing in great companies at low P/E multiples. To simplify an already simple book, great companies are generally measured as companies that can generate lots of profit without requiring a lot of capital. This means that they have high ROEs.
Far from being reluctantly propelled into hostilities by popular war fever, leaders incite that fever in order to gather support for their war policies. Thereby do they attempt to distract the public from pressing domestic matters, serve the overseas interests of U.S. investors, justify gargantuan military budgets, and present themselves as great leaders.
We worked personally with a lot of great VCs. They just work incredibly hard at supporting entrepreneurs and their companies.
VCs like acquisitions as much as IPOs because the acquiring companies often can rationalize paying large multiples over the current valuation of the startup.
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